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E & E News - Congressional Reactions to New BLM Rule Mostly Sour

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By Phil Taylor

The Obama administration's release yesterday of a sweeping rule governing oil and gas drilling across roughly 700 million acres of federal lands drew an expected firestorm of criticism from Republicans, and one salvo from the president's own party.

While policymakers are still combing through the details of the Bureau of Land Management's 171-page draft hydraulic fracturing rule, initial reactions on Capitol Hill and from industry and environmental groups were almost universally negative.

The new rule makes significant overtures to industry by favoring chemical disclosure on the privately managed FracFocus website, offering to defer to state drilling regulations, allowing well-bore integrity tests to apply to more than one well and exempting a process called "acidizing" similar to fracking used in California's Monterey Shale (EnergyWire, May 17).

But the rule failed to assuage the top concern of many Republicans and drilling groups: that BLM has proposed a duplicative solution in search of a problem.

"On the very same day they release this rule claiming its necessity, a Department of the Interior representative could not name, when asked under oath, a single state that was doing a poor job of regulating hydraulic fracturing," said Rep. Cynthia Lummis (R-Wyo.), co-chairwoman of the conservative Congressional Western Caucus, referring to the testimony yesterday of Tommy Beaudreau, Interior's acting assistant secretary in charge of BLM.

In a joint statement, House Energy and Commerce Committee leaders Fred Upton (R-Mich.), Ed Whitfield (R-Ky.) and John Shimkus (R-Ill.) said the new rule was a redundant layer of red tape that would stifle use of the very technologies -- horizontal drilling and hydraulic fracturing -- that have unlocked the nation's energy renaissance.

"As the primary regulators, the states have ensured safe and responsible development during this recent energy boom," the lawmakers said.

Rep. Don Young (R-Alaska) accused the Obama administration of being "beholden to environmental special interests," even though an EnergyWire review of White House meetings showed that industry groups lobbying on the rule got at least 20 meetings with top Obama officials in 2012 (EnergyWire, April 12).

Reps. Rob Bishop (R-Utah) and Steve Pearce (R-N.M.) and Sen. John Barrasso (R-Wyo.) also slammed the BLM proposal, arguing similarly that states have safely managed fracking for decades. Pearce quoted former BLM Director Bob Abbey as saying there is no evidence that fracking has "adversely affected groundwater" under state control.

But Interior Secretary Sally Jewell fired back at those attacks yesterday, arguing that the current state fracking rules are a "patchwork."

"You're going to hear from folks that we caved in to industry or we bowed to pressure from environmentalists," Jewell said. "The fact is that this is a common-sense proposal that benefited from the feedback we got from stakeholders on all sides of this issue."

In a significant break from previous rules, the new BLM draft offers a "variance process" under which states whose drilling rules are deemed as strong as BLM's would be exempted from the new rule. Officials did not indicate which states may qualify.

"The BLM will continue to work with states and tribes to establish formal agreements that will leverage the powers of partnerships, and reduce duplication of efforts for agencies and operators," the agency said yesterday. "Through the public comment period, BLM looks forward to receiving additional input on how the variance provision can be used most effectively to minimize unnecessary burdens."

Some lawmakers and influential industry groups were appreciative of the variance provision and others designed to add flexibility for drillers.

"The states are prudently regulating hydraulic fracturing," said Sen. Lisa Murkowski (R-Alaska), ranking member of the Senate Energy and Natural Resources Committee. "Federal regulators seem to acknowledge as much by asking for comments on a process that would allow drilling companies to follow state and tribal regulations that meet or exceed those proposed by this rule. While I'm still reviewing the full rule, it appears BLM has addressed some of the concerns, but we still must guard against duplicative and potentially contradictory regulations."

The rule is sure to grab a spotlight Thursday when Murkowski's committee holds a hearing on "best practices" for shale gas drilling, which will feature testimony from BLM, industry officials and environmentalists who have fought fracking.

Democrats were split on the new rule, with Rep. Ed Markey of Massachusetts, the ranking member of the House Natural Resources Committee, calling it "extremely disappointing." But two Colorado Democrats lauded it as a step in the right direction.

"This rule essentially says to oil companies that they can frack first and ask questions later," said Markey, who was perhaps referring to provisions in the rule that allow companies to disclose the chemicals they inject underground after the well is fracked.

"It gives oil and gas companies the freedom to frack without the proper safety protections and disclosures the American public deserve," he said. "Oil and gas companies like to say that every well is different, but this fracking rule would treat wells like cookie-cutter activities, potentially leaving huge holes in ensuring that fracking activities on public lands are being done properly and safely."

Reps. Jared Polis (D-Colo.) and Diana DeGette (D-Colo.) were more positive, though both identified shortcomings in the rule.

"While there is a great deal of room for improvement, the BLM's efforts to increase its oversight of natural gas extraction on public lands is a step forward," Polis said. "In particular, the well casing requirements will reduce instances of gas leaks in groundwater and will better protect our precious water resources from contamination from fracking fluids."

DeGette said the rule was "far from ideal" but recognizes the importance of uniform, national standards. She said she has significant concerns with the rule's deference to FracFocus, citing a recent Harvard University study that found the industry-funded site has "serious flaws" as a means of disclosure for hydraulic fracturing chemicals (EnergyWire, April 23).

"The website is not effective and 'does not serve the interests of the public,'" DeGette said. "Further, under the proposed rule, oil and gas companies would only be required to disclose after drilling has already taken place when, in essence, the horse would already be out of the barn."

Environmental groups, too, said they had serious concerns with the use of FracFocus, among many other criticisms of the rule.

"They are riddled with gaping holes that endanger clean, safe drinking water supplies for millions of Americans nationwide," said Frances Beinecke, president of the Natural Resources Defense Council. "They also put the fate of millions of acres of America's last remaining wild places in jeopardy."

Interior Deputy Secretary David Hayes yesterday acknowledged that FracFocus was "not as facile" as some would like and said the department wants to hear more comment on the registry.

In addition, Neil Kornze, who operates as BLM's acting director, said the new rule requires drillers to offer more proof for why certain chemicals should be exempt from disclosure as trade secrets, a process that will follow the model of Colorado. Kornze said the rule also responds to environmentalists' recommendations about monitoring of cementing and well construction.

Still, the proposal wouldn't ban diesel fuel from being used in fracturing fluid, it doesn't put any public land off limits, and it doesn't deal with air pollution, as some environmental groups had hoped.

Sportsmen for Responsible Energy Development, led by the National Wildlife Federation, the Theodore Roosevelt Conservation Partnership and Trout Unlimited, today largely praised the rule but urged BLM to require disclosure of chemicals before wells are fracked.

"The new rule represents an important step forward for developing energy responsibly on America's public lands," said Brad Powell, senior policy director for Trout Unlimited's Sportsmen's Conservation Project. "Disclosure of the chemicals used on public lands is essential."


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